Pay to Play It Again

NM reaches a tipping point for public corruption

“Another day, another eyebrow-raising story about the Richardson administration.” So tweeted political journalist Heath Haussamen on Dec. 9 about his blog post on the Albuquerque Journal’s reporting on contracts given to two former members of Gov. Bill Richardson’s cabinet.

As Haussamen’s tweet implies, the article was yet one more chapter—maybe even just a page in a chapter—of the 2009 story called Pay to Play in New Mexico. It’s a story with a wide cast of coast-to-coast characters—financiers, politicians, whistle-blowers and federal investigators. The details are immense, but the bottom line is clear: Political corruption—of the perceived, alleged and verified variety—is rampant in New Mexico.

SFR took a large bite out of the story at the beginning of the year by examining the many companies and people who have donated to Richardson or his committees and also received state contracts, appointments or other benefits.
Pay to play clearly got SFR readers’ notice; “Pay to Play and Governor Richardson” won first place for “best local political scandal”.

In the summer, the pay-to-play scandal on everyone’s lips involved CDR Financial Products’ contract to provide financial services for Governor Richardson’s Investment Partnership (GRIP). Bad press over GRIP-gate cost Richardson the commerce secretary job for the Obama administration. In August, the governor and his staff were told they would not be charged in the case.

The end? Not hardly. At last count, two federal agencies were investigating both the State Investment Council and the Educational Retirement Board, while a pay-to-play investigation in New York has resulted in criminal pleas for several financiers with ties to New Mexico.

Resolution of New Mexico’s investigations is unlikely in the final weeks of 2009, but “someone’s going to jail next year,” Haussamen, who runs nmpolitics.net, predicts to SFR. “People who admitted to criminal activity in New York are talking; federal investigators are here; it seems inevitable we’ll see something happen,” he says.

Lawyer Victor Marshall says “it’s never a good idea to make predictions,” but “very clearly, we’re not at the bottom of this, we’re not at the end.” Marshall represents Frank Foy, the ERB’s former chief investment officer whose lawsuits against the state allege he was pressured to invest in or award contracts to politically connected companies/people.

On the bright side, Marshall continues, “it sure seems like the process is moving forward. It seems like every week we find out something more about the bribes and kickbacks.”

If unveiling the web of political corruption passes for good news, “ethics reform” in 2010 would be really good news.

The influential think tank Think New Mexico will lobby for reforms detailed in its fall publication, “Restoring Trust: Banning Political Contributions from Contractors and Lobbyists.” The report notes the high-profile cases of former state Treasurer Robert Vigil, former Senate President Pro Tem Manny Aragon and former Deputy Superintendent of Insurance Joe Ruiz, as well as the 50 felony indictments this year of former Secretary of State Rebecca Vigil-Giron. (And let’s not forget the multiple fraud indictments of the New Mexico housing authority case.)

Think New Mexico proposes banning contractors, lobbyists and anyone seeking a government subsidy from making or bundling political contributions to any public official with the “power to influence the contract or subsidy,” the report says.

“The common denominator in all of these scandals has been the confluence of big government contracts and lobbyists,” Think New Mexico Executive Director Fred Nathan says. “And while I don’t think our reforms would totally end corruption, it would be more than a big step forward in changing the culture of corruption.”

The reforms also could help the perception of public service, Santa Fe County Democratic Party Chairman Richard Ellenberg says. In December, the county party endorsed Think’s proposal.

“If we’re going to return to a day when the leaders of our community are willing to be leaders of our government, we’ve got to raise the image of public service,” Ellenberg says. “This seems to me an important step in that direction.”

Think New Mexico’s proposals are part of Richardson’s ethics legislative agenda for the 2010 session. Richardson also will propose an independent ethics commission, public service announcement prohibitions for candidates, campaign contribution disclosure for state contractors, a one-year ban on former lawmakers becoming lobbyists and a whistle-blower protection act.

“A rush to reform is not surprising,” Dave Levinthal, communications director for the Center for Responsive Politics, which tracks financial influence in politics, says. “Not surprisingly, oftentimes it takes a major political scandal to draw enough attention to go down the road of reforming,” he says.

Acknowledging that New Mexico is “definitely in the upper echelon” among states with high-profile scandals, Levinthal says one common element for governments with less corruption is transparency.

“If the business of government is conducted out in the open, it’s a lot harder for people in positions of power to get away with criminality or get away with patronage or get away with unethical actions.”